General Motors Holdings LLC

About General Motors Holdings LLC

General Motors (GM), one of the world's largest auto manufacturers, makes cars and trucks, with well known brands such as Buick, Cadillac, Chevrolet, and GMC. GM also builds cars through its GM Daewoo, Opel, Vauxhall, and Holden units. The company operates through five business segments: GM North America, GM Europe, GM International Operations, and GM South America. Financing activities are primarily conducted by General Motors Financial Company. The current iteration of GM traces its roots to mid-2009, when the former GM was split into two companies after it emerged from Chapter 11 bankruptcy protection: General Motors and Motors Liquidation (the name for leftover assets).

Geographic Reach

GM has more than 100 locations in the US (excluding automotive financing operations and dealerships) and 15 locations in Canada. It has assembly, manufacturing, distribution, office, or warehousing operations in 61 other countries.

GM Financial has 46 facilities, of which 22 are located in the US. Its major facilities outside the US are in Canada, the UK, Brazil, and Spain.

The US generated around 60% of its total sales in 2014.

Operations

The company operates through four automotive segments. GM North America (GMNA) generates 65% of its total sales and has operations in Canada, Central America, Mexico, the Caribbean, and the US. GM International Operations (GMIO) operates in the Asia/Pacific, Eastern Europe, and Africa and generates 9% of sales. GM Europe (GME), 14% of sales, caters to Europe and Russia. GM South America (GMSA), 8% of sales, has operations in Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela.

The company sells cars and trucks to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. GM markets its vehicles worldwide primarily through a network of independent distributors, dealers, and authorized sales, service, and parts outlets with a network of over 20,700 dealerships. It spends about $5 billion each year on advertising.

Financial Performance

The company has seen an upward trend in its revenues since 2010 (following GM's emergence from bankrupcty protection).

In 2014 net revenues eased up by 0.3% due to increased revenues from GM Financial and GMNA, partially offset by lower sales in the GMIO and GMSA segments.

GM Financial revenues increased thanks to finance charge income of $0.9 billion due to the acquisition of Ally Financial international operations and increased leased vehicle income of $0.5 billion due to a larger lease portfolio.

GMIO's revenues declined due to decreased wholesale volumes related to discontinuing sales of the Chevrolet Spark, Aveo, Cruze, Captiva and Orlando in Europe and lower sales of older version SUVs and trucks and other car models. Unfavorable net foreign currency transactions were also a factor.

GMSA segment revenues decreased due to lower wholesale volumes in Brazil associated with weaker demand for the Chevrolet Celta, Classic, and Agile and decreases across Argentina and Venezuela caused by difficult economic conditions; and unfavorable net foreign currency conditions.

In 2014 GM's net income decreased by $1.3 billion due to higher automotive cost of sales, partially offset by lower increased revenues. The cost of sales increased due to recall campaigns, a catch-up adjustment recorded related to the change in estimate for recall campaigns, and a charge stemming from the ignition switch recall compensation program.

That year GM's net cash provided by the operating activities decreased by $2.5 billion due to reduced net income and change in other operating assets and liabilities.

Strategy

The company’s strategic plan includes several major initiatives to help to achieve 9-10% margins by the early 2020s. The initiatives include a strong product pipeline to retain customers; leading the industry in quality and safety; taking a lead in product design, with light-weight and mixed material body structures and in leading edge technology; growing its brands (especially the Cadillac brand); and to continuing to develop GM Financial as its captive automotive financing company.

Like most auto makers, GM is also focusing on its growth in China. It aims to increase the number of nameplates under the Buick, Chevrolet and Cadillac brands in China and continue to grow its business under the Baojun, Jiefang, and Wuling brands.

In 2014 GM launched its watershed education program in seven new communities across Canada, the largest international expansion in the initiative’s 25-year history. The GM Global Rivers Environmental Education Network now comprises 53 GM facilities, including all of the company’s US and Canadian manufacturing plants.

GM's efforts to improve its products include developing energy-saving models, such as the Chevrolet Volt, an electric car powered by a lithium-ion battery, introduced in late 2010. The company introduced the Chevrolet Spark electric car in 2013. GM also formed a partnership with Segway to develop a two-wheeled, two-seat electric vehicle. GM also has about 20 FlexFuel cars available in the US.

In late 2013 GM company announced plans to cease mainstream distribution of its Chevrolet brand in Western and Central Europe in 2015 due to the challenging business model and difficult economic situation in Europe. The company believes the move will improve its European operations through a further strengthening of its Opel and Vauxhall brands and reduce the market complexity within those regions.

In the early years of the auto industry, hundreds of carmakers each produced a few models. William Durant, who bought a failing Buick Motors in 1904, reasoned that manufacturers could benefit from banding together and formed the General Motors Company in Flint, Michigan, in 1908.

The auto giant went through a six-week period of bankruptcy protection in 2009. GM was split into two companies when it emerged from Chapter 11 -- General Motors and Motors Liquidation (the name for leftover assets). In 2011 Motors Liquidation sold the majority of its assets, which encompassed almost 90 industrial sites in 14 states, which cleared the way for GM bondholders to receive stock in the new company.